Some thoughts on… Defining Character
Election Day is Tuesday, Nov 5 and States have started early voting. We complete our dialogue on the policy stance of the Presidential candidates. The previous topics were immigration, individual rights and foreign policy. This week is the economy.
Steve Uhl perspective
The Economy is our final topic with a few short days until the election. There is so much that could be encompassed under that umbrella – but the bottom line is that economic confidence is low as is the fraction of people who answer the famous question “are you better off than you were four years ago?” positively.
Maybe step one to improve things would be to have people in government who have a modicum of business experience, rather than the permanent political class. While that’s no guarantee of success, people who have made their careers in the private sector are more likely to instinctively understand what drives the economy than a career politician, all else being equal. The Biden / Harris administration has been almost devoid of private sector experience, and it shows. Some highlights of Harris’ economic agenda, to the extent there is one, reflect that lack of experience. It is all ‘small ball’ – thinking that a government rule tweak here, or government rule tweak there, is how to manage an economy. Her first proposal was about banning price gouging by grocery stores. The economic illiteracy displayed is hardly worth recounting here. But it’s of one with other ‘micro’ policies, like forgivable loans for Black men. (and two weeks later ‘Latino men’ – what next?). The conceit that tweaking rules here and there from Washington is an effective way to help the economy is one that only career politicians have. In addition, every tweaked and targeted program inherently invites and incentivizes political lobbying and influence peddling. Who gets to decide what ‘forgivable loan’ gets forgiven, and when? Who decides what constitutes grocery store ‘gouging’? Is buying milk at CVS included or not? Perhaps that’s the point as a politician – after all, if people aren’t coming to lobby for this or that favor, what else would they do with their time? Republicans are not immune to this tendency of course, but are a little better at resisting it.
By contrast – people with private sector background are more likely at least to understand that the economy is way more complicated than can be ‘managed’ from on high, and that instead government’s role should be to ensure the underlying environment is favorable. That means focusing on broad based tax, energy and regulatory policies. It also means considering the incentives created by a given policy – not just what constituent will this immediately benefit. These are all things that are less likely to be changed on the whim of an administrator somewhere, and more likely to allow business people and workers the space to make good long-term decisions.
Viewed through this lens, economic prospects under Trump will be far superior to those under Harris. In any event, the electorate is dissatisfied with the current economy, and there is nothing in any Harris proposals that would really ‘move the needle’ in any significant way.
Parting thoughts:
1) Thanks to Waseem for letting me contribute to this series. As you can tell there is very little overlap in our perspectives, but when we re-connected it was all in the spirit of good positive vibrant debate and I’m sure we each benefitted from hearing the other’s point of view
2) Maybe Waseem will invite me back in 2028, when Trump’s second term is finishing up, for another series at the next election cycle 😊
3) My main takeaway from the experience – it is really hard to write something new, interesting and compelling. I confess I often started to write things and found myself regurgitating some talking points, so tried to regroup, reflect and rethink. Which is very valuable.
Waseem Noor perspective
The performance of the economy during past administrations is simply presented by this BBC article. Prices were higher under Biden/ Harris compared to Trump, and the country grew more under Biden/ Harris.
Yet macro-economic facts can be abstract to voters. Instead, people feel the economy was better during Trump. To them GDP and unemployment in the US don’t matter, and they ask questions like:
· Why are prices going up?
· Why is it difficult to afford a house?
· Why am I earning less compared to before?
We can answer these three questions facing voters using concepts that Econ 101 students would know.
1. “Why are prices going up?” - The economy goes through cycles
The mismanagement of the COVID crisis occurred in January 2020 under the last year of the Trump presidency. The economic effects of the crisis impacted the Biden/ Harris administration in January 2021.
Prices temporarily went down after March 2020 with reduced demand for products – restaurants were closed, movie theater shut, airlines were not flying, and people were unemployed. With vaccines available in Spring 2021, demand roared back for goods and services, but there was a shortage in supply given manufacturing backlogs. Many goods – silicon chips, televisions, imported food - were not available due to backed-up ports. Increased demand and decreased supply inevitably lead to higher prices.
Since end of 2023, inflation has declined to regular levels as supply has increased for products and demand has dropped to normal. To address further price increases, Harris has promised to prevent price gouging. Trump plans to increase consumer taxes (tariffs) on all imported products which will definitely increase prices again as shown in this WSJ video.
2. “Why is it difficult to afford a house?” - Economic actions have a lagged effect
Housing prices have increased over the past decade, and there is shortage in affordable housing. Combining this shortage with higher interest rates on mortgages, many people are unable to find or afford buying a house. The origins of this shortage come from the 2008 financial crisis.
Biden/Harris pushed through a program in May 2022 to increase housing, but the plan has taken time to implement and will not have effects for another 5 years. Along with increasing supply, Harris is proposing to directly aid home shoppers by providing up to $25,000 in down-payment assistance to first-time buyers who have paid their rent on time for two years.
Trump has no proposal for housing, and has claimed that deportation of immigrants will solve the problem.
3. “Why am I earning less compared to before?” - Short run effects are different from long run trends
Although the country overall is doing better, some groups believe they are worse off than four years. What they are feeling is true, and this is not a short-run effect under Biden but a long-run trend. Since 1980, relative income has declined especially for one group: non-college educated males.
The fall started under Reagan, was compounded by the loss of manufacturing jobs under NAFTA and has continued as the US economy produces and exports globally more competitive products like electric vehicles, AI and services which need educated labor.
Harris is building on existing policies to help middle class individuals and expanding education to re-skill workers affected by globalization.
Trump has no policies to reverse this trend. Under his past administration, the only law put in place was the 2017 Tax Cut and Jobs Act that reduced taxes to high income individuals and companies. It did not help middle class families, and it created $2 trillion in debt which will need to be paid by the US population and our children. Trump will extend this law in 2025 if re-elected. Wharton Business School estimates the extension will lead to an additional $4 trillion in debt by 2034.
Summary
Reviewing our joint posting, I agree with some of Steve’s arguments. We need better immigration policies and need to protect our borders. We need to extricate from our involvement in multiple wars. Freedom of speech is essential. A big thanks to him for helping create a healthy debate.
Where I disagree with Steve is that character matters of the leader who we elect to implement this change.
Harris is a vibrant, mature woman. Her character is rational, she is levelheaded in temperament, and she has discipline. She supports freedom, including reproductive self-determination, and has a record of passing legislation to protect individual rights. Her foreign policy stance is stable, nuanced and alliance focused. She thinks about both long-term solutions and short-term fixes. She has repeatedly reached out to unify the country.
Trump lacks all these qualities.
He is an old man who dangerously says whatever he wants, and advocates exclusively for himself. As we have shown, he has no plans or policies that will solve the grievances he taps into. He is not going to accomplish what his supporters want; he will only do what serves him. And always has.
To defend Trump, supporters argue that we shouldn’t listen to his words, that he won’t carry out all the things that he wants. Which of these items which he has stated he will conduct in his second term, do you think he will not do?
- Implement mass deportation of immigrants
- Dismantle the Affordable Care Act
- Use the Justice Department to prosecute his enemies
- Appoint ultra conservative Federal judges and Supreme Court justices
- Change the Federal Reserve so it is no longer an independent entity
I believe he will attempt all these actions, and none of them will help me, those I care about, or the country. Note that past Republican Presidents, Senators, and Congressmen, along with half of his former cabinet, also do not support him.
Character matters. Given Trump’s lack of it, I do not trust him to watch over the children in our lives, help our neighbors, bring the country together, or follow the law.
We are electing someone to an office that can move markets, destabilize the international order, and fire nuclear missiles. I believe there is a clear choice in this election, and that is Kamala Harris.